Bidder's Statement (Cash offer by Atacama Copper) - Antofagasta plc

(iii)
(iv)
(v)
(vi)
If Tethyan receives a Competing Proposal that the Tethyan Board considers may
be a superior proposal it must immediately notify Atacama of the terms of that
proposal and must allow Atacama at least 3 business days to propose terms to vary
its Offer to match or better the new proposal, and if Atacama does submit such a
revised proposal which the Tethyan Board acting reasonably considers to match or
better the new proposal, then Tethyan will recommend the revised Atacama
proposal instead of the new proposal.
A break fee of $1.9 million (exclusive of GST) will be payable to Antofagasta
PLC in the event of certain circumstances occurring and the Offer is not successful
(set out further below). The break fee is intended to compensate Antofagasta PLC
for advisory costs and out of pocket expenses that it incurs in relation to the Offer,
costs of management time and reasonable opportunity costs it incurs in pursuing
the Offer or not pursuing other alternative initiatives. The fee represents
approximately 1% of the market capitalisation of Tethyan at the Offer Price
(assuming that all Tethyan Options on issue are exercised). In the Deed of
Undertaking Tethyan acknowledges the requirement to pay the break fee to be fair
and reasonable in order to secure the significant benefits to Tethyan and its
Shareholders resulting from the Offer.
In summary, the break fee will be payable if any of the following occurs on or
before the earlier of the day after the end of the Offer Period and the payment of
any break fee (see Section 7.4(b)(iv) above):
(A)
(B)
(C)
(D)
(E)
(F)
a Competing Proposal is announced and at that time a person (other than
Antofagasta PLC or its related entities) either enters into a transaction, or
varies the terms of an existing transaction, falling within the definition of
Competing Proposal or acquires Control of or merges or amalgamates with
Tethyan or any of its related entities;
a person other than Antofagasta PLC or any of its related entities
(including any consortia to which they are a member) obtains Control of
Tethyan;
any director of Tethyan recommends against, qualifies or withdraws his
recommendation or support of the Offer or publicly recommends or
promotes a Competing Proposal;
a material adverse change occurs as a result of an act or omission of
Tethyan and arises from an event which occurred before the announcement
of the Offer but which is announced after that date and was not previously
disclosed to Antofagasta PLC;
Tethyan is in material breach of the Deed of Undertaking or the
Implementation Agreement and, if the breach is remediable, which breach
has not been remedied after Atacama has given notice requiring it to be
remedied; or
there is a breach of the 'no material acquisitions, disposals or
commitments' or 'no prescribed occurrences' Conditions and the breach of
that condition has not been waived.
For the purposes of the Deed of Undertaking, a Competing Proposal is any
expression of interest, proposal, offer or transaction by any person (other than
Antofagasta PLC or any of its related entities) (including any consortia to which
they are a member) to consider or enter into any transaction or improving the
terms of an existing transaction which is similar to the Offer or any other
transaction under which:
page 31